Al Jazeera Embraces Cable TV, Loses Web

By

John Jannarone and

Keach Hagey

Updated Jan. 3, 2013 9:01 p.m. ET

Al Jazeera used the Web to build a following in America, which it hopes to exploit on cable television through Wednesday's purchase of Current TV. But to keep cable operators happy, Al Jazeera may have to make a difficult bargain: Giving up on the Web.

The Qatar government-backed television news operation, which acquired Current TV for a few hundred million dollars from investors including Al Gore, said Thursday that it will at least temporarily stop streaming online Al Jazeera English, its global English-language news service, in about 90 days. That's when it plans to replace Current TV's programming with Al Jazeera English.

Al Jazeera agreed to purchase the U.S. cable channel Current TV in an effort to expand the Qatar-based news service's U.S. audience. The WSJ's Keach Hagey explains what the move means for the media industry and why not all cable operators are on board with the deal. Photo: Getty Images.

Al Jazeera plans later to launch an entirely new channel, Al Jazeera America, that will combine programming from the existing English-language service with new material. The new channel likely won't be streamed online either, a spokesman said.

And it is unclear whether the original English service will reappear online: the spokesman said Thursday a decision about that was dependent on negotiations with cable operators.

The network's decision to pull its service off the Web is at the behest of cable and satellite operators. It reflects a broader conflict between pay television and online streaming that other TV channels face. Because cable and satellite operators pay networks to carry their programming, the operators don't want the programming appearing for free online. Aside from older series available through services like Netflix, most cable programming is available online only to people who subscribe to cable TV.

ENLARGE

Al Jazeera's website has developed a small following in the U.S.
Al Jazeera

Earlier

"We'd love to be able to do both" cable and Internet distribution, "but the deals with distributors prevent it," the Al Jazeera spokesman said. "The economics are better on cable."

The irony is that for smaller outlets in particular, with limited or no cable distribution, the Web can be a powerful wedge—helping networks build an audience that makes it easier to negotiate for broader, and more profitable distribution with cable and satellite operators.

"Having an online presence is critical to proving to distributors that a network's content and brand are powerful and can draw an audience and subscriptions," said Lynne Costantini, a longtime cable distribution veteran who now consults for television networks. "But then they're also saying, 'Don't put too much stuff online for free, because then the value proposition to the cable subscriber is less.' "

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Al Jazeera Media is making a strong push into the American market with its purchase of Current TV. John Owen, journalism professor at the City University of London, tells the WSJ's Deborah Kan why it could be difficult for the Qatar-owned news network to break into the U.S. market. Photo: Getty Images.

Al Jazeera's acquisition of Current TV and the possibility of increased distribution in the U.S. still won't enable Al Jazeera to become what it wants to be—a household name here. Jon Friedman discusses on The News Hub.

Al Jazeera credits online streaming for building its profile in the U.S. "Al Jazeera's decision to create a U.S.-based news channel was based in part on the fact that Americans have already shown a great demand for its news and programs: Almost 40% of all online viewing of Al Jazeera English comes from the United States," Al Jazeera said Wednesday.

The website had 971,000 unique visitors in November 2012, up from 825,000 in the same month a year earlier, according to comScore. In comparison, Time Warner Inc.TWX-0.45%'s CNN has averaged about 700,000 households watching at any given minute in primetime since late September, according to Nielsen.

Al Jazeera has long sought to get national cable distribution for its English-language service—until now without success. And a major reason was that it was using the Web to stream the service, cable executives say. Currently, Al Jazeera English only airs in a few local cable markets like Washington, D.C., and Burlington, Vt.

It's unclear how many of Al Jazeera's online viewers have cable. Persuading those who don't to sign up to get the network might be tough, one executive at an independent network said.

"If [Al Jazeera] already has a really passionate following, that's a head start. But it's tough to win over people to cable if they don't have it already," the executive said.

And Current TV itself had very limited distribution. Al Jazeera expects to reach about 40 million households as a result of the Current TV acquisition, taking into account Time Warner Cable Inc.TWC-0.43%'s dropping of Current on Wednesday as a result of the ownership change. Fully distributed networks reach upwards of 90 million subscribers. Current also had very low ratings: an average of only 22,000 households tuned into the channel between January and November at any given time.

Time Warner Cable said Thursday it would keep its options open regarding Al Jazeera America. "As the service develops, we will evaluate whether it makes sense, for our customers, to launch the network," a spokeswoman said.

Other channels have faced similar challenges balancing the Web and pay TV. When television personality Keith Olbermann joined Current in 2011, he wasn't able to put his show online. Mr. Olbermann cited the restriction in a lawsuit he filed against Current. "By not streaming the program, Current destroyed the bond between Olbermann and his audience," the complaint alleged. A Current TV spokeswoman declined to comment.

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